I've had exactly the same problem described above. Installed Nvidia drivers via via Additional Drivers and all was working fine.
After that I decided to remove the Nvidia drivers and rebooted the laptop. My screen resolution was set as 640x480, without any possibility of changing it.
Asking for help, on #ubuntu+1 @ Freenode, someone told me to check /etc/modprobe.d for a nvidia conf file. I've done that and it was there.
Deleting the file and rebooting the laptop solved the issue.

This is very much a bug in nvidia-graphics-drivers-340. One can debate if software-properties should or shouldn't purge (though traditionally, the argument was that silent frontends shouldn't purge because the user hasn't explicitly asked for that), but if a removed package's unpurged conffiles cause the system to misbehave, that package needs to be rethought to avoid that situation.

As stated in duped bug removing nvidia drivers (nvidia-390 here) via software-properties only removes the driver meta package so actually nothing is removed.
(- and of course /etc/modprobe.d/nvidia-graphics-drivers.conf will still be there ..

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